Morgan Stanley Lowers Unilever Stock Target

last updated on

Morgan Stanley Lowers Unilever Stock Target

Morgan Stanley Sets 37.75 Price Target For Unilever Stock.

Morgan Stanley has re-evaluated the Unilever stock and downgraded it to an 'underweight' rating from 'equal weight.' The rating firm has also lowered the price target for Unilever stock from around 41.00 to nearly 37.75.

According to Morgan Stanley, the current rating depends on whether Unilever can complete the strategies. But if the company fails to do so, it would force the rating agency to re-rate the stock.

Unilever Rating Set To Underweight

There are issues regarding when the company plans to reinvest. Similarly, the market in which Unilever is operating is also very competitive, which can pose some significant challenges. Another thing that could be better for Unilever is its cash conversion, which is lower than average in the sector.

As for what's causing Unilever to have low cash conversion, Morgan Stanley's analyst added that it has to do with non-underlying costs.

In the medium term, Unilever's growth forecast is similar to what we see in the overall sector. This is even though the Unilever company enjoys a strong presence in various emerging markets.

The analysts at Morgan Stanley have also slashed the stock price target as they believe that only a modest premium can be expected from Unilever's P/E ratio.

In the HPC sector (Household and Personal Care), Morgan Stanley has recommended a company called Lreal along with Halon. According to them, these companies are in an excellent position to benefit due to value creation and high brand loyalty.

Overall, Unilever's stock price target was lowered by 3.25, which is not good news for its investors. However, we also need to remember that inflation is high all over the globe while consumer spending remains depressed. This means Unilever's prime sector will also be impacted due to these economic constraints.

Trending Stories